Dive Brief:
- Amazon is piloting a new small-format concept in Chicago “under the same roof” as — but separate from — an existing Whole Foods Market store, the company confirmed in an email to sister publication Grocery Dive Thursday.
- The store, called Amazon Grocery, is meant for quick fill-in trips like grocery top-offs, coffee and grab-and-go meals to keep shoppers from needing to visit multiple grocery locations to complete their shopping.
- The debut of this test-and-learn store is the latest in a string of grocery-focused efforts by Amazon this year and builds on the retailer’s work to better align itself with Whole Foods’ business.
Dive Insight:
Amazon’s scaled-down grocery concept comes just a month after Whole Foods debuted its small-format Daily Shop, highlighting the retail giant’s continued efforts to redefine its grocery arm.
Amazon said it is aware that many Whole Foods customers visit other stores to get national grocery brands or household essentials for their weekly shop. This pilot location — located in the same One Chicago building as a Whole Foods store — aims to minimize the need for Whole Foods customers to shop elsewhere.
Tony Hoggett, Amazon’s senior vice president of worldwide grocery stores, posted on LinkedIn about the new concept’s debut on Thursday: “Customers can now shop their favorite natural and organic brands while also quickly topping up their groceries with a larger assortment of favorite national brands, grab-and-go meals, and household essentials — all in one trip.”
The store houses 3,500 products and spans 3,800 square feet, making it almost a third the size of Whole Foods’ Daily Shop on the Upper East Side of Manhattan. The location does not feature Just Walk Out frictionless checkout technology.
Currently, Amazon said it does not have any expansion plans to share for the concept.
Throughout 2024, Amazon has built its grocery operations by expanding its Amazon Fresh footprint, launching new private label lines, debuting two new subscription plans and streamlining shopping across its channels.
Earlier this month, Amazon announced it had revamped 26 Amazon Fresh fulfillment centers to include a wider array of products, including Amazon Fresh and Whole Foods goods. In the same press release, the company noted it’s building its first-ever automated micro-fulfillment center in a Pennsylvania Whole Foods store to bolster the location’s product assortment.
These growth initiatives emphasize Amazon’s mission over the past year to get the “fundamentals” of grocery right, but also show the company can do this while utilizing its massive online retail market.
Hoggett recently shared on LinkedIn that Whole Foods has seen over 40% sales growth since Amazon bought the grocery chain in 2017.
